Chris Bradford on Austin, economics and other stuff

February 12, 2015

Last June, Council initiated a Code amendment to reduce the regulatory barriers to accessory dwelling units a/k/a "garage apartments," "secondary unit" or "granny flats." Staff has drafted a proposed ordinance that would reduce some of the sillier barriers to ADUs, such as the requirement that they be served by a driveway at least 9' wide if located on a lot lacking a rear alley.

AURA has released a paper and counter-proposal, arguing that Staff's proposal does not go far enough. (I agree.) AURA is urging, among other things, that the minimum lot size for ADUs be reduced from 7,000 sf to 5,750 sf. ADUs currently are not allowed on lots smaller than 7,000 unless: (i) located in a neighborhood that has adopted a neighborhood plan and (ii) the neighborhood plan allows the "secondary apartment" infill option. Several central neighborhoods (including some in pricey 78704) have yet to adopt a neighborhood plan. ADUs are not available on smaller lots in these neighborhoods by default, depriving some homeowners (and potential tenants) of this option.

AURA also reasonably suggests allowing "attached" ADUs. Code today requires that an ADU be located at least 15 feet to the rear of the primary structure. Staff's proposal would reduce the required separation to 10 feet. But why require separation at all? ADUs are, by design, unobtrusive structures, but an attached ADU might be even less obtrusive than a detached ADU. The McMansion ordinance would remain as a rigid limitation on the size and bulk of the combined structure.

Staff is now pitching its proposal on the boards-and-commissions circuit. Staff is suggesting that the required parking for "micro units" be reduced to 0.6 spaces per unit, and the minimum site area be reduced to 400 sf per unit.

The proposed parking reduction is particularly timid. Efficiency apartments today require 0.8 parking spaces per unit -- at least in the urban core, where they tend to be built -- so Staff's proposal would merely reduce the required parking by one space for every five units. This seems like more of a gesture toward lowering the parking barrier than a sincere effort to lower the parking barrier.

The minimum site area reduction is better. The current minimum is between 800 sf and 2,500 sf per unit in multi-family districts, depending on the precise zoning. As a practical matter, lowering the minimum site area to 400 sf per unit would allow micro-unit developments to achieve a floor-to-area ratio of just 1.25:1 or so (depending on the amount of common area), so this would not open the door to extradordinarily dense development. It would likely make existing height and impervious cover limits the limiting factors for micro-unit developments, though, particularly given the minimal reduction in parking.

But the biggest problem with Staff's proposal is that it is stingy with eligible parcels. Council's resolution called for reducing the barriers for developments located on Core Transit Corridors and Future Core Transit Corridors or within Transit Oriented Development Districts.

Staff is proposing to exclude all Vertical Mixed Use parcels, to exclude parcels within Transit Oriented Development Districts, and to limit the parcels to those with actual frontage on CTCs or FCTCs.

The result is that very few parcels are eligible, particularly in the central city where these sorts of development are most needed.

Staff has prepared maps showing which parcels would be eligible. Here is north Austin:

And here are the parcels eligible in south Austin:

In the true urban core (i.e., north of Ben White and south of 183), there are precious few eligible parcels. There are only three eligible sites on all of South Lamar -- one of which is the site of Post's new VMU-style development. The clump of eligible parcels just north of downtown are all on University of Texas property. UT doesn't need the City's permission to redevelop its property (and some of these parcels, such as DKR stadium, aren't likely to be redeveloped anyway).

The largest clusters of eligible parcels are instead in unmistakably suburban locations, such as along Slaughter in far South Austin, along South Congress south of Ben White, and along Jollyville Road, with smaller clusters on South First near Ben White and in east Austin.

Staff is thus proposing to lower the barriers to micro units mainly along a few choice suburban streets rather than in the central core. Was making small units relatively more attractive in the suburbs than the core really what Council had in mind?

May 20, 2014

Council member Riley and co-sponsor Mayor Pro Tem Cole are is proposing to make it easier to build accessory dwelling units (e.g., garage apartments) smaller than 500 square feet.

The garage apartment regulations in Austin are a mess. Garage apartments are ostensibly legal on SF-3 lots with at least 7,000 sf (and on smaller lots in some neighborhood planning areas). But the Land Development Code imposes all sorts of regulations that often turn out to be de facto barriers. For example, the LDC requires a secondary apartment to be served by a driveway at least 9 feet wide unless the apartment is on an alley. Some houses are set too close to the property line to allow a driveway, so secondary units are essentially forbidden on these lots. Even when there is enough room for a driveway, the driveway chews up the lot's ration of impervious cover, and costs a bunch of money to boot.

Ditto with parking. Lots of single-family homes in our older neighborhoods were built without parking. Adding a secondary apartment not only requires adding a parking space for the secondary unit, but also adding two parking spaces for the principal dwelling -- even if the principal dwelling isn't being enlarged at all. (At least, that's how I've been told staff is interpreting the Code.)

The draft Code Diagnosis calls out our secondary apartment regulations in a section entitled "Lack of Household Affordability and Choice":

As one of the key Missing Middle housing types, secondary apartments can provide increased density in existing neighborhoods without sacrificing neighborhood character. However, the LDC places many regulations on new units that could serve as a barrier to their development, including requirements for lot size, a paved driveway, on-site parking (even on lots that do not currently have off-street parking), site configuration, and water supply, etc. In many neighborhoods, secondary apartments are not allowed, reducing the flexibility homeowners have to stay in their neighborhoods. However, in these same neighborhoods, detached garages with bathrooms but not kitchens are allowed. These detached garages sometimes serve as temporary housing. If a diversified housing stock is a city and community goal, regulations for secondary apartments could allow for pre-approved designs, streamlined/user-friendly permitting, impact fee waivers, and the “grandfathering” of existing site elements, as long as they don’t pose a health and safety hazard.

Riley's resolution would direct Staff to draft Code amendments that eliminate the driveway and parking requirements for units with less than 500 sf. It would also convene a stakeholder group to identify other possible regulatory barriers to these small units.

This is great. But why limit this to units with less than 500 square feet?

Garage apartments and secondary apartments are capped at 850 square feet. Fashioning a specific set of regulations for 500 sf units will add another layer of complexity to an already complex Code: one set of regulations for structures that have 500 sf or less; another set for structures that have between 501 and 850 sf. The Code already distinguishes between secondary units allowed as a matter of right on SF-3 lots with at least 7,000 sf ("two-family residential use") and secondary units allowed as a matter of right on smaller lots in certain neighborhood planning areas ("secondary apartment special use"). We'll need a special matrix just to keep up with the garage apartment regulations.

What would we get in exchange for this extra complexity? Obviously, we'd get fewer 850 sf units and more 500 sf units. But it's not at all clear that 500 sf units are more affordable than 850 sf units. 850 sf units are big enough for two bedrooms, which means they're more easily shared by unrelated roommates. Splitting the rent of an 850 sf unit is often be cheaper than shouldering the rent of a 500 sf unit by yourself.

We'd also get slightly larger principal dwellings. The McMansion ordinance limits the gross floor area on central city single-family lots. A 7,000 sf lot, for example, can hold a maximum of 2,800 sf of buildable space, including the floor area of the secondary unit. Are we better off encouraging 2,300 sf principal dwellings with 500 sf secondary units? Or are we better off with 1,950 sf principal dwellings and 850 sf secondary units? I'm not sure either question makes any sense. Regardless, it's hard to see how encouraging larger principal dwellings is a sound affordability policy.

The only "downside" to eliminating the barriers across the board is that two-bedroom units are more likely to be inhabited by a tenant who parks on the street. But if we intend to dismiss any Code reform that increases the demand for on-street parking, then we will leave ourselves precious little room for real reform. Secondary units are a relatively unobtrusive form of infill that can be designed and built quickly, that allow families maximum flexibility over the several stages of their lives, and that provide options to renters who would like to live in the central city without living in a large apartment complex on a busy street. Our goal should be to manage trade offs rather than pretend they can be avoided.

Update: Although the staff posting says that Mayor Pro Tem Cole is a co-sponsor, I understand that was an error, and that Councilmember Martinez is a co-sponsor.

May 14, 2014

The City has engaged Fregonese Associaties to refine its Envision Tomorrow scenario tool to assist with modelling for CodeNext. The goal, as I understand it, is for the EnvisionTomorrow tool, when fully refined, to give us a good idea of how different land-use rules will affect the built environment. The tool roughly predicts population, density, VMT, and a host of indicators that planners tend to get excited about.

I'm on the Citizens Advisory Group Working Group charged with vetting the Envision Tomorrow tool. We are receiving a surge of data, charts and maps in response to our requests for more detail.

No complaints here. On the contrary, the City's GIS department (at least I think it's the City's GIS department) has produced some spectaculor maps of late, to wit:

This maps shows where buildings are limited to 30' in height because of their proximity to single family homes. More precisely, it maps the height limits triggered by the "compatibility rules." The compatibility rules say that if a property is zoned SF-5 or more restrictive, or has a use permitted in an SF-5 or more restrictive district, then nearby properties must have their heightss capped, even if the base zoning allow more height. The theory is that single-family homes need all other buildings to be shrunk so they don't look out of place next to the single-family homes. At least I think that's the theory. Austin has a celebrated history of battling large, scary buildings; it could be the compatibility rules simply sprang from the same primal impulse.

The height limit for a structure is two stories and 30 feet, if the structure is 50 feet or less from property that is zoned SF-5 or more restrictive, or contains a single-family use, even if that use occurs in a commercial district. The vast areas shaded red in the map are all places where the buildings are limited to 30' height-- except for single-family homes, which are limited to 32' or 35'. (Does any other city actually require its commercial uses to be shorter than its single-family homes?)

Anyway, if you've ever wondered why Austin is mostly a low-slung town outside of downtown and West Campus, there you go. There are narrow chinks in the compatibility armor that allow multifamily or commercial buildings to reach 60' (the allotted height in the CS base zoning district) on core transit corridors, but they have to be a healthy distance from a single family home. If you study the 78704 for a bit, you'll see there are very few such gaps in compatibility coverage.

May 08, 2014

The Code Diagnosis focuses on summarizing major issues identified by the public, city staff, and the CodeNEXT team within the existing Land Development Code (LDC). While the input and analysis of the document often drilled down to the specifics of particular regulations, this report steps back and presents the overarching issues within the current LDC. This report defines the basis or need for revising the current LDC, but does not prescribe or recommend the direction for the new code.

In other words, the purpose of a code diagnosis is to identify the problems, not the solutions.

How one frames the problems, of course, tends to affect which solutions one proposes. That makes this an important document.

From the summary of key findings (pp. 10-11):

Austin’s current Land Development Code is an extremely detailed, dense, and complicated document created over the last 30 years. The work of identifying specific, detailed solutions to problems identified with the LDC will occur during the approximately 2 year long process of creating a Preliminary and Final Draft Code. This section highlights the top ten issues identified by the consultant team, but it does not propose solutions but rather identifies issues that, based on the consultant team’s experience, are contributing to concerns with the current development review process or could hinder achieving the goals of Imagine Austin.

The most visible and critical issue in the analysis of the city’s regulations is that the code structure and organization is overly complicated, not well coordinated, and does not meet modern-day best practices in code writing layout. A more in-depth analysis demonstrates that the 33 base zoning districts, which are the foundation of the overall system, have been ineffective in creating a high-quality, compatible built environment in the City of Austin, especially as development pressures have grown and the demand for walkable urban living has increased. This is illustrated by the fact that only a little over 42% of the entire city is regulated simply with the base zoning districts.

The ineffective base zoning districts have led to the creation of layer upon layer of supplemental regulations, in the Combining Districts, Compatibility Standards, and Subchapters E and F to name the primary new layers, to try to make this system more effective. This complexity, in combination with the length of the process and some of the specific regulations, has hindered small-scale, incremental adaptive-reuse projects and the incubation of local small businesses. In addition, none of the base zoning districts allow or encourage diverse, small-footprint Missing Middle housing types, which are necessary for Austin to meet its affordability goals. (See Sidebar “What is the Missing Middle?” on page 59.). This ultimately has led to a development review and entitlement process that is highly complicated.

The report is organized around a "top 10" list of problems. Amy Smith has a succinct summary at the Chronicle.

The City will take comment on the draft Code Diagnosis through June 30. The public will have a chance to give live input on May 19, when the City hosts an event it is calling "Cracking the Code: Revealing the major issues with Austin's Land Development Code." See here for details. You can also weigh in on the Speak Up Austin site.

March 21, 2014

Council members Riley and Spelman and Mayor Pro Tem Cole have placed a resolution on next Thursday's agenda initiating a Code amendment to "reduce or eliminate" the minimum site area and parking requirements for dwelling units less than 500 square feet and that are located on core transit corridors, future transit corridors or within TOD districts.

I'm still thinking this through, but this could be a big step. On the core transit corridors, the minimum site area change would really only affect properties that are not already zoned VMU. All CTCs have property that is zoned plain multi-family or mixed use -- I'm just not sure how much. I don't have any sense how this would affect TODs.

Honestely, I'd prefer to see Council abolish the minimum site area requirement for the entire urban core. (It could import the geographic limits from the occupancy reduction ordinance.) This is nonetheless a welcome step.

Eliminating or reducing parking minimums could make a dramatic difference. Although the large VMU projects are building lots of parking, eliminating the parking minimum for small units would allow developments to cater specifically to people who don't want to own cars. Foundation Communities, in fact, recently got Council's blessing for a LIHTC project on South Lamar that will provide only 45 parking spaces for 120 or so efficiency units. Foundation Communities is developing its project as a "congregate care facility" (it will have a 24-hour attendant on site), which entitles it to lower parking minimums. The project is on relatively shallow lots that probably lack room for the 88 or so parking spaces that would be required under the standard parking minimum.

There are lots of properties on our core transit corridors that are too small to hold large structured parking garages. The minimum parking requirement effectively prevents these from being developed with multi-family development. Or maybe it doesn't. Perhaps market constraints would prevent these from being developed anyway. Perhaps there aren't many people willing to live without a car in this town, even on core transit corridors. Still, it's hard to make a market argument against something the market hasn't been allowed to supply.

Back in January, Council passed a resolution directing the Director of Planning to study the barriers to "micro-units" in Austin -- i.e., very small, efficiency apartments -- and to make recommendations for eliminating the barriers. My take was essentially that the City doesn't impose any meaningful size limit per se, but it does discourage small apartments through the Land Development Code's minimum site area requirements, which require a fixed amount of land per efficiency unit, no matter how small the unit.

Greg Guernsey, the Director of Planning, responded to the Council resolution this week. He noted that the zoning regulations do not set an explicit minimumsize. The building code does impose an effective minimum size (approximately 250 square feet), but that minimum is not a real obstacle to the development of micro-units in Austin:

Under the IBC [International Building Code], an efficiency must have 220 square feet of living area, with additional space required for a bathroom, making a feasible minimum space of approximately 250 square feet. For a one bedroom unit, the living area must be 120 square feet, with each additional habitable space at least 70 square feet, and additional space required for a bathroom. A one bedroom also requires approximately 250 square feet of space.

With most micro-units in the 300-350 square foot range, the IBC does not pose any real obstacle to the development of micro-units in Austin. Some municipalities, such as San Jose and Santa Barbara, have adopted local amendments to the IBC that allow the minimum size of an efficiency to be 150 square feet.

I haven't conducted a rigorous survey of recent infill development, but my impression, too, is that the IBC minimum doesn't really matter. If it were a binding constraint, we'd see units being built with around 250 square feet of floor space. But the smallest units I could find in the current wave of development are more than 100 square feet larger than that.

Guernsey instead identified two indirect barriers to micro-units: minimum site area requirements and parking.

Minimum site area requirements: Site area requirements specify the minimum amount of land required per dwelling unit. In Austin’s zoning code, these requirements differ depending on the zoning district. Site area requirements exist for most single-family and multifamily zoning districts, except for MF-6 zoning (highest density multifamily zoning district), DMU (Downtown Mixed Use) zoning, CBD (Central Business District) zoning, or through the utilization of the VMU (Vertical Mixed Use) combining district. Although there is no specified cap in density allowed in any zoning district, the minimum site area requirements effectively do as much. Under Austin’s current code, the smallest site area requirement is 800 square feet, for efficiency units located in MF-5 zoning.

Minimum site area requirements are an obvious culprit. They impose a high fixed cost per unit (the land cost) while simultaneously restricting the quantity of units. This incentivizes the construction of larger units. I pointed out that at least a couple of recent VMU projects on South Lamar (which are not subject to minimum site area requirements) have many more and likely smaller units than they'd have under the minimum site area requirement.

Guernsey also identified minimum parking requirements as a barrier:

Parking requirements: Minimum off-street parking requirements exist for all single-family and multifamily uses, depending on which zoning district they are located in. CBD and DMU districts do not have minimum parking requirements, and in Austin’s central core, the minimum parking requirements can be reduced by 20%, compared to land outside the core. In addition, the VMU combining district allows for a parking reduction compared to what would otherwise be required for that base zoning district to which VMU has been applied. Under today’s code, Austin’s multifamily use requires at least one space per dwelling, unless it meets one of the above conditions for reduced parking. That means that aside from CBD and DMU zoning districts, a multifamily development will have close to one parking spot per dwelling (at the 20% central core reduction) or more. This requirement for parking adds an additional cost per unit, and reduces density by requiring land for parking instead of additional dwelling units.

A parking space requires a minimum of 325 square feet or so (including space required for aisles and entrances), so it functions a lot like a minimum site area requirement. Plus, the fixed cost of building the parking space must be factored into the cost of the dwelling.

Guernsey identified the following ways to remove these constraints:

Minimum site area requirements: These requirements may be adjusted for urban core projects. In order to allow the kind of density typical of micro-unit developments, the site area requirements for multifamily zoning districts could be reduced or removed. As an alternative to adjusting the Code, micro-unit projects could request MF-6 zoning.

Parking requirements: Minimum parking requirements are appropriate for areas of Austin that are not well served by public transit or are lower density. Existing parking reductions and eliminations are a good way to allow the market to determine if parking is really necessary for a given development. To make the development of micro-units more feasible for property not zoned CBD or DMU (which is typically more expensive), parking minimums could be reduced or eliminated. A possible drawback to this, as has been experienced in Portland, is that tenants simply park their cars on adjacent neighborhood streets, much to the consternation of the people who live on those streets. One approach could be to couple any parking reduction with on-site car share (already incentivized in current code) or bike share facilities, or in conjunction with a residential permit parking program for adjacent neighborhoods.

Telling people to ask for MF-6 zoning doesn't seem to me to be a practical solution, if the goal is to encourage (or at least not discourage) micro-units. That ask requires a full-fledged zoning case, which is time-consuming, expensive and uncertain. That's a compelling strategy if you want to raise the average fixed cost of your units, not lower it. Developers, when they do ask for and receive MF-6 zoning, inevitably agree to all sorts of restrictions to limit the height and bulk of the development. That's fine, but it would make more sense to use the height and FAR limits already in place -- and there are different limits for each flavor of MF zoning -- rather than require a bunch of ad hoc negotiation.

Reducing parking could also help. As I've pointed out before, the existing parking minimums might not matter for the developers of the large VMU projects. (I must caveat this, again, by acknowledging that I haven't done a systematic survey.) But there are many smaller sites on our core transit corridors which might be developable only with reduced parking. I suspect we'll find out as developers work their way through the choicer sites.

February 13, 2014

The City of Austin allows up to six unrelated adults to occupy a residential structure in a single-family neighborhood. The national average is 3.5. For Texas cities, the number is under three.

Austin has the highest occupancy level in the state. It also has one of the highest in the country. Not only is Austin an outlier, it is an extreme outlier. Reduced occupancy limits will take away the incentive for investors to destroy existing affordable housing, and it will alleviate many of growing nuisances arising from stealth dorms in existing houses and duplexes.

"Highest occupancy level" is an ambiguous term. Does she mean the highest average occupancy, or the highest occupancy limits?

No matter. She's wrong in either case.

According to the 2008-2012 ACS, the average household size of Austin's owner-occupied units is 2.57, and the average household size of its renter-occupied units is 2.25. The respective averages for Texas are 2.92 and 2.61. Austin has lower average occupancy than the state as a whole. As I noted a few years ago, the Austin's central core mostly lost population between 2000 and 2010, which was largely driven by shrinking household sizes.

Austin's housing is not overcrowded.

I think Sanger is actually referring to occupancy limits rather than average occupancies, though. In this case, she is wrong because of Houston, San Antonio and Dallas.

First, a bit of background on Texas occupancy limits. The Texas Property Code imposes a maximum occupancy for residential leases of three adults per bedroom. Cities are free to impose their own, more restrictive occupancy limits.

Historically, cities have adopted two kinds of occupancy limits. One is a true maximum occupancy limit. It typically requires a certain amount of floor space per occupant. The goal is to prevent overcrowding for health and safety reasons.

The other kind of occupancy limit is a zoning regulation adopted for the purpose of preserving the "single family character" of neighborhoods or similarly nebulous goals. There are many ways of writing a zoning regulation, but the typical regulatory scheme is to define "family" to mean "people related by blood or marriage or up to X unrelated adults" and then limit the use of dwellings in single-family districts to "families." Austin's occupancy ordinance of this type, even though the cityhas gone out of its way to avoid defining "family."

(The distinction between the two types of limits, incidentally, matters for the Fair Housing Act, and was the subject of a U.S. Supreme Court case in 1995.)

Of the largest four cities, Austin is the only one with a zoning occupancy limit.

Houston does not have a zoning occupancy limit. I confirmed this by asking a Houston code enforcement officer. Houston does have a health and safety maximum, which prohibits "overcrowded" dwellings. "Overcrowded" means:

(1) A dwelling unit or a congregate living facility not containing at least 150 square feet of net floor area for the first resident and at least 100 square feet of additional net floor area for each additional resident; or

(2) A dwelling unit or a congregate living facility of two or more rooms not containing at least 70 square feet of net floor area in each room occupied by one resident for sleeping purposes; or

(3) A dwelling unit or a congregate living facility of two or more rooms not containing at least 50 square feet of net floor area per resident in each room occupied by more than one resident for sleeping purposes[.]

This standard would require, by way of illustration, only 1,150 square feet of net floor area for ten roommates.

San Antonio does not have a zoning occupancy limit. It recently adopted a Property Maintenance Code, which although lacking an explicit health and safety limit on occupancy (other than for efficiency units (3)), does provide, "The number of persons occupying a dwelling unit shall not create conditions that, in the opinion of the code official, endanger the life, health, safety or welfare of the occupants." See Section 404.5. I spoke to a Code enforcement official who told me that Code Enforcement considers occupancy above two adults per bedroom a code violation.

The Dallas zoning code does not appear to have a zoning occupancy limit. I'm hedging a bit, because interpreting another city's zoning code can be tricky; what the planning director thinks it means matters a lot. But I called Dallas Code Enforcement, asked specifically whether there were occupancy limits in single-family dwellings, and was told no, other than the occupancy limits based on floor area noted above.

So, if you take the set of "four largest cities," Austin is an outlier, in that we're the only one of the four that attempts to regulate occupancy for zoning purposes.

Any individual or two or more persons related by blood, adoption or marriage or not more than five unrelated persons living and cooking as a single housekeeping unit or home and expressly excluding lodging, boarding or fraternity houses.

It defines "dwelling unit" to be:

A building, or any portion thereof, containing a complete set of independent living facilities for occupancy and use by one family, including permanent provisions for living, sleeping, eating, sanitation and cooking within a kitchen for the exclusive use of the occupants whose intent is to habitat the dwelling unit.

A single-family dwelling unit, then, can only have five unrelated occupants per dwelling unit; a unit with more than five unrelated occupants isn't a "dwelling unit" and therefore not a permitted use.

At least, that's how I read Fort Worth's Code.

El Paso's is similar.

I haven't fact-checked Sanger's claim that the national average occupancy limit is 3.5. How you calculate an average occupancy limit when some places don't have one at all is a mystery to me. I'm skeptical of the average even if you limit it to places that do have occupency limits. Here is a list of occupancy limits in the Pacific Northwest. The average of this particular sample would be higher than 3.5. And note that Austin is in line with Portland (6) and below Seattle (8).

Note & correction: An earlier version of this post incorrectly stated that Houston does not have a health & safety minimum occupancy requirement.

February 07, 2014

I'm trying to gather data to measure the changes in West Campus since the University Neighborhood Overlay began to transform the area. I'm especially interested in photos of old apartment buildings, the little apartment guides handed out at convenience stores -- I guarantee you there are some pack rats who've kept those things for a decade. And price information. If you have a clear memory of what you paid for a West Campus apartment in 2003 (or have your bank records to jog your memory), shoot me a note with the place you lived, a brief description (e.g., 'two-bedroom/one-bath apartment shared by 2 splitting $800 rent; run down but safe."

January 26, 2014

Councilmember Spelman is trying to determine whether we can do something about affordability with micro units:

Thanks to Austin City Council Member Bill Spelman, who’s concerned about spiraling local housing costs, the city will look into a possible way to help more folks get a little place of their own.

The operative word here is little, and Spelman, who doesn’t shy from big ideas (he also thinks we might need a local subway system), is serious about this small idea. It’s called “micro-housing.”

“This is an affordable housing issue,” he told me. “What we’ve found in other urban markets is that, as construction prices get close to $300 per square foot, young folks are willing to consider living in much smaller than traditional apartments.” (See, it’s not just us less-young folks who daydream about downsizing.)

Affordable housing math is simple: Costs can be reduced by cutting per-square-foot prices or by buying or renting fewer square feet. Focused on the latter, Spelman won the council’s OK on Thursday to direct the city staff to research “recommendations for making micro-unit development legal and viable in Austin, including any necessary code amendments.”

Spelman is thinking pretty small, as in apartments of 300 to 500 square feet. The idea is one of several now pending at City Hall to deal with the problem, caused by our coolness, of high housing costs.

I am not aware of any explicit minimum size for apartments in the Land Development Code. The building code imposes some kind of de facto minimum size but, whatever it is, it is really small. It certainly allows units of 400 ft2 or so. (Foundation Communities' downtown Capital Studios will consist of efficiencies averaging 415 ft2. The MLK at Rio Grande Apartments will have a few 382 ft2 efficiencies.)

But there are ways to discourage small apartments without an outright prohibition. One strategy is to impose high fixed costs on rental units. High fixed costs make very small units unbearably expensive on a per-square-foot basis, thereby encouraging larger units.

Requiring a minimum amount of land per dwelling unit does just that. Austin's multi-family regulations include a "minimum site area requirement" in all multi-family districts other than the nearly mythical MF-6 district. These regulations require a certain amount of site area for each dwelling unit: one amount for efficiency apartments, slightly more for one-bedroom apartments, and more for two-bedroom (and larger) apartments. The minimum site area requirement does not vary by unit size, however. This means that if you're building a one-bedroom apartment, you'll use up the same allotment of site area whether you make the one-bedroom large or small. Small apartments conseqently have a much higher per-square-foot land cost than large apartments.

An example: Austin's MF-3 zoning district purports to be our "medium density" district. It requires a minimum of 1,200 ft2 of site area for each efficiency unit, 1,500 ft2 for each one-bedroom, and 1,800 ft2 for each two-bedroom.

Suppose the raw land cost in a particular MF-3 district is $40/ft2 (e.g., $400,000 for a 10,000 ft2 lot). Let's work out the impact of the minimum site area requirements on the cost per square foot.

A 400 ft2 efficiency requires an allotment of 1,200 ft2 of site area, which works out to $48,000 worth of land. That's $120 per square foot. Just in land cost. Foundation, floor, kitchen and roof are extra. A 1,000 ft2 two-bedroom apartment requires 1,800 ft2 of site area, or $72,000 worth of land. That's just $72 per square foot. Thanks to the minimum site area requirement -- which, again, applies per unit rather than per developed square foot -- the land cost for the moderately-sized two-bedroom apartment is 40% less per square foot than the land cost for the small efficiency.

And the math means that the land cost per square foot always goes down as the size of the apartment goes up. The land cost per square foot for a 1,200 ft2 two-bedroom is $60/ft2, compared to $72/ft2 for a 1,000 ft2 apartment. The LDC effectively imposes a $12/ft2 shadow tax on going from 1,200 ft2 to 1,000 ft2 when raw land is worht $40/ft2. That's a hefty penalty on going smaller. If you're going to pay $72,000 in land costs for that two bedroom apartment regardless of its actual size, you might as well make it bigger: the marginal building cost to make the rooms slightly bigger is not all that high.

While our Land Devel0pment Code imposes lots of unnecessary housing costs, the minimum site area requirement is particularly pernicious because it creates shortages in MF-zoned land. If the Code requires everyone to use a lot more framing lumber than they need, that runs up the cost of building apartments. But it does not run up the price of framing lumber because Austin's demand for framing lumber is too small to affect the national market for framing lumber. But when Austin requires apartments to use more land than necessary, that not only runs up the cost of those apartments, it runs up the cost of all apartments in town, because it reduces the effective supply of land that can be developed with apartments. Our shortage of a developable land for multi-family housing in this city is purely a consequence of regulation, not geography.

But do the minimum site area requirements really matter? Do they cause developers to build fewer (or larger units) than they otherwise would?

This is an empirical question. Theoretically, the minimum site area requirements might be set below the market demand for density, in which case they wouldn't matter. This may very well be the case in Austin's suburban markets. It's hard to tell.

But there is a quick and dirty test to check whether minimum site area requirements matter in the urban core. Some places in the urban core aren't subject to minimum site area requirements. Downtown, obviously, although downtown is perhaps a special case because of the atypically high construction costs. But minimum site area requirements don't apply in Vertical Mixed Use districts, either, as long as the developer restricts 10% of the units in the VMU building to affordable housing. The building must fit within the allowed setbacks and height limit (and provide the required amount of parking), but the developer can divide the building into as many units as it wants to.

A spot check of two of the large VMU projects on South Lamar currently under development shows that, yes, they have more units -- many more units -- than they could have in an MF-5 district (which is the "high density" multi-family district.)

The vertical mixed use development flanking the Broken Spoke has two residential phases. The smaller one, just north of the Broken Spoke, would require about 15% more site area for its 103 apartments if it were developed under MF-5 regulations. The larger one to the south of the Broken Spoke would require about 60% more land for its 275 apartments. (I'm having to make assumptions about which units would be classified as efficiencies and which one-bedrooms, but my assumptions are conservative.)

Likewise, the Hanover South Lamar, which has a mix of VMU and that very rare MF-6 zoning (MF-6, like VMU, does not have minimum site area requirements), is much denser than anything that could be built under MF-5. It will have 340 units on a 157,472 ft2 site. Again, making reasonable assumptions about which units would be classified as efficiencies rather than one-bedrooms, Hanover would need a site roughly twice as large to hold the same mix of units in an MF-5 district.

Comparing VMU to multi-family is hardly apples to apples, of course. Vertical mixed use developments must allocate the first-floor space to non-residential uses. In other words, they have to sacrifice 20% or more of their buildable space to provide the commercial and retail space. This implies that VMU developers would provide even more residential units per acre if they could.

It is almost certainly the case that minimum site area requirements are binding in the high-cost urban core.

It's also notable that both developments will provide small units (although perhaps not as small as Spelman has in mind). A little less than 10% of Hanover's units will have 491 ft2, while roughly 30% of the Broken Spoke units will have an average of 495 ft2. If the developers had had to comply with minimum site area requirements, it's hard to believe that they would have provided so many small units. Indeed, the average size of all the units in these developments is almost certainly smaller due to the elimination of the shadow tax on going smaller.

Why not follow the VMU model for all multi-family housing? Get rid of minimum site area requirements. Specify a building envelope (which can of course vary by district), prescribe a few, reasonable design regulations, and let the developer decide how many units to fit within the envelope. We'll get more units, smaller units, and cheaper units. That's the goal, right?

And if you say that's the goal but can't help flinching at the prospect of all that density, don't worry -- there'll still be minimum parking requirements.